Moderate low-carbohydrate/high-fat (LC-HF) diets are widely used to induce weight loss in overweight subjects, whereas extreme ketogenic LC-HF diets are used to treat neurological disorders like pediatric epilepsy. Usage of LC-HF diets for improvement of glucose metabolism is highly controversial; some studies suggest that LC-HF diets ameliorate glucose tolerance, whereas other investigations could not identify positive effects of these diets or reported impaired insulin sensitivity. Here, we investigate the effects of LC-HF diets on glucose and insulin metabolism in a well-characterized animal model. Male rats were fed isoenergetic or hypocaloric amounts of standard control diet, a high-protein “Atkins-style” LC-HF diet, or a low-protein, ketogenic, LC-HF diet. Both LC-HF diets induced lower fasting glucose and insulin levels associated with lower pancreatic β-cell volumes. However, dynamic challenge tests (oral and intraperitoneal glucose tolerance tests, insulin-tolerance tests, and hyperinsulinemic euglycemic clamps) revealed that LC-HF pair-fed rats exhibited impaired glucose tolerance and impaired hepatic and peripheral tissue insulin sensitivity, the latter potentially being mediated by elevated intramyocellular lipids. Adjusting visceral fat mass in LC-HF groups to that of controls by reducing the intake of LC-HF diets to 80% of the pair-fed groups did not prevent glucose intolerance. Taken together, these data show that lack of dietary carbohydrates leads to glucose intolerance and insulin resistance in rats despite causing a reduction in fasting glucose and insulin concentrations. Our results argue against a beneficial effect of LC-HF diets on glucose and insulin metabolism, at least under physiological conditions. Therefore, use of LC-HF diets for weight loss or other therapeutic purposes should be balanced against potentially harmful metabolic side effects.